European worries hang over markets
City Index May 10, 2012 5:30 PM
<p> Asian stocks are set to follow negative offshore leads after US markets posted losses in response to growing tension within Europe. The Dow Jones […]</p>
Asian stocks are set to follow negative offshore leads after US markets posted losses in response to growing tension within Europe. The Dow Jones Industrial average shed 0.8% in its six straight days of losses and the longest losing streak in more than nine months.
Retail and discretionary names were among the worst hit with the likes of Macy’s falling by 3.7% as profit numbers missed market estimates.
New Corp will probably surprise some with its earnings out this morning Asian time, reporting third quarter adjusted total segment operating income of US$1.38bn, which implies growth of 16% compared to the prior corresponding period. The strong result was driven by large gains in the cable network programming business.
Publishing saw a large fall, no doubt impacted by recent scandals, but a combination of cable and television growth shows the resilience of earnings composition and quantifies the extent to which publishing actually impacts the total group.
For Newscorp, operating income growth in the cable networking programming division was driven by double digit growth at the Regional Sports Networks, FX Network and FOX News. International channels grew earnings by 9%, led by double digit increases in Fox International via Latin America and Asia. Advertising revenue at the domestic cable channels were 10% which is a solid outcome given the economic challenges.
In currency markets, the Australian dollar continues to hold just above parity, last trading at 1.0049 against the US dollar. The Euro remains vulnerable, last at 1.2937 while the dollar yen was flat on yesterday’s levels, last at 79.62.
Japanese exporters will be eyeing the currency positive very closely, having recently received slight reprieve but not enough to keep them satisfied.
Gold breached below SU$1600/oz to last trade at US$1590/oz while silver is holding ground above US$29.22/oz. Copper remains slightly above the US$3.60-65/lb support range, holding for now but no doubt will be tested over the next few hours.
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.